Bloomberg News

Gold, Silver Futures Advance as U.S. Budget Concerns Escalate

Gold and silver futures rose for
the first time in four sessions on mounting concern that U.S.
budget negotiations have stalled, raising the risk of a
government shutdown.

The Senate advanced a stopgap spending measure after
Republican Ted Cruz defied party leaders by staging an extended
speech that lasted more than 21 hours. By a vote of 100-0, with
60 votes required, the Senate will debate the House bill passed
Sept. 20. The next fiscal year begins Oct. 1.

“Worries about the U.S. government shutting down are
pushing people to gold,” Phil Streible, a senior commodity
broker at R.J. O’Brien & Associates in Chicago, said in a
telephone interview.

Gold futures for delivery in December rose 1.5 percent to
settle at $1,336.20 an ounce at 1:52 p.m. on the Comex in New
York. The price declined 3.9 percent in the previous three
sessions.

The U.S. faced an impasse over raising the debt ceiling in
2011 before Congress approved a plan to head off a default that
was signed by the president that August. Gold reached a record
$1,923.70 on Sept. 6, 2011.

Bullion has dropped 20 percent this year as some investors
lost faith in the metal amid a U.S. equity rally to a record and
low inflation.

Increased Reserves

In August, the price climbed 6.3 percent, partly because of
escalating tensions between the U.S. and Syria. Last month,
Russia and Kazakhstan were among nations that increased gold
reserves, International Monetary Fund data showed today.

Silver futures for December delivery added 1.4 percent to
$21.886 an ounce on the Comex. The price tumbled 7.3 percent in
the previous three sessions.

On the New York Mercantile Exchange, platinum futures for
January delivery gained 0.7 percent to $1,432.30 an ounce.

In South Africa, the world’s biggest producer, Anglo
American Platinum Ltd. (AMS) faces a legal challenge and strikes over
plans to fire 3,300 workers.

Palladium futures for December delivery increased 0.8
percent to $725.70 an ounce.

To contact the reporters on this story:
Nicholas Larkin in London at
nlarkin1@bloomberg.net;
Debarati Roy in New York at
droy5@bloomberg.net.

To contact the editor responsible for this story:
Steve Stroth at
sstroth@bloomberg.net